The global economic importance of Iraq and Kuwait
The importance of Iraq and Kuwait for the world economy skyrocketed when the vast oil reserves of the Gulf region were discovered. Kuwait began commercial-scale crude oil production in 1949 and after two decades became the world's sixth largest oil producer. It has used its oil revenues to invest abroad, mainly to buy securities. For a long time, Kuwait had no interest in a large increase in oil prices because it would have caused a fall in the international currency, bond and stock markets. (In the Iraq-Iran war, Kuwait remained neutral and provided Iraq with approximately USD 9 billion in aid.)
Iraq has used its oil revenues to embark on long-term military and economic programmes, not only to buy weapons but also, with the help of its secret services, the technology and materials needed to produce weapons of mass destruction. Between 1982 and 1989, during the Iraq-Iran war, it bought weapons for some 42.8 billion dollars. Saddam has developed the Iraqi army into one of the most powerful in the world, and the war with Iran has not broken it. In fact, he thought he had gained considerable military experience, enabling him to move from territorial claims over Kuwait to active action.
Each year, OPEC member countries set production quotas for the amount of oil each member country can produce and agree on the world market price. The agreements are mostly not respected by the member countries. In the late 1980s, keeping oil prices low was not in the interest of oil-exporting states, including Iraq. Kuwait and the United Arab Emirates exceeded their production quotas on several occasions, causing the world market price to fall and consequently causing serious losses to the Iraqi economy, which was in debt during the Iraq-Iran war.
Oil exports accounted for 99 percent of Iraq's annual exports. The revenue from this, apart from a decline in 1988, was around $11 billion a year.
The role of oil production quotas in the escalation of the Iraq-Kuwait situation
At a meeting of Gulf oil ministers in Jeddah on 10 July 1990, Iraq's demand was discussed, and Kuwait, the United Arab Emirates, Iraq, Iran and Saudi Arabia fixed the exact production quotas for each country. A week later, Iraq made a new demand, accusing Kuwait of producing disproportionate amounts of oil from the Rumaila oil field (which straddles the border between the two countries), located on the border of the two countries (Basra South).) It demanded compensation of $2.4 billion for the excess production, which Kuwait refused. Kuwait has similarly refused to forgive some $9 billion in Iraqi debt accumulated during the Iraq-Iran war. Indeed, Kuwait has raised the issue of debt repayment every time Iraq has made territorial claims.
The representatives of the two countries met in Jeddah on 31 July 1990, with Saudi mediation, where Kuwait agreed to negotiate the writing off of Iraqi debt and the lease of an island in the Gulf. However, the Iraqi side only reiterated the demands already made by Saddam Hussein that Kuwait cede the disputed territories to Iraq, give up part of its oil drilling rights in the southern oil fields and provide Iraq with $10 billion in aid. The talks broke down because of the invasion by Iraq. Saddam's 'pan-Arab' vision, guided by the pro-Baath ideology of the Revolutionary Command Council, played a decisive role in triggering the crisis. The objective was to give Iraq a leading role in the Arab world, to create a coalition against the number one enemy, Israel, and then to use its military might to dictate oil prices by organising its leadership in the Persian Gulf. Its more limited aim was to compromise in order to gain a larger share of the 1 million barrels per day production from the Rumaila oil field in the Iraq-Kuwait border region.
Background to the invasion of Kuwait
Iraq came out of the war against Iran with a stronger military experience, and during the war it continuously improved its military equipment, bought new equipment and significantly increased the size of its army.
The launching of the invasion of Kuwait was facilitated by the favourable development of the Iraqi domestic, regional and international political situation, which included the Baath Party's "pan-Arab" policy in domestic politics, the debt (the size of which Iraq could not repay) and the threat of Iraq's military potential against Israel.
The causes of the war in Iraq and Kuwait lie primarily with the Iraqi regime itself. In its most extreme form, Saddam Hussein's one-man dictatorship and cult of personality implemented positions of power through the division of power between family and kinship. The propaganda of the regime instilled in the Iraqi people an unconditional obedience to Saddam and, at different times, a sense of sacrifice for the common Arab national cause. The objective, apart from personal ambition, was to make Iraq the leading power in the region.
After the first war, Iran failed to recover and Iraq became the largest and most experienced military power in the region. All this has led Iraq to conclude that the way is now open for them to take the first steps towards regional great power status, while at the same time resolving the serious problems of their debts to the country and the discontent that followed the Iranian war.
An important aspect was that they could assert their historic claim on Kuwait and finally break the territorial settlement that they believed Britain had imposed on the Gulf region, and which was one of the causes of Iraqi discontent.
The occupation of Kuwait
Just after midnight on 2 August 1990, three elite Iraqi Republican Guard tank divisions attacked along the Safwan-Kuwait route and from the desert in southern Iraq, and captured Kuwait in a matter of hours. Subsequently, by mid-November, the 28-nation allied force had established the main operational groupings capable of absorbing and repelling a pre-emptive Iraqi strike against Saudi Arabia.
Actions of the UN Security Council
Meanwhile, UN Security Council resolutions, which required consensus among the five permanent members, attempted to resolve the situation peacefully and persuade Iraq to withdraw its forces from Kuwait. The attempts failed due to the intransigence of the Baghdad leadership.
In the period immediately preceding the war, several of the leading states of the international coalition, notably the US and Britain, went beyond the objectives set out in the UN Security Council resolutions and sought to destroy Iraq and build up a power that would give them and the developed industrialised countries long-term control of the region's oil resources.
The conflict showed that the leading states of the international coalition were primarily concerned with their own interests, securing future control over the world's major oil reserves, and only secondarily with the liberation of Kuwait.
Objective:
- The destruction of Iraq's military potential.
- Implement UN Security Council resolutions on Iraq.
- Develop a new stable balance of power, Iraq must remain weak.
- Reasonable containment of oil prices to restore consumer purchasing power.
- Resolving the situation in Palestine.
Operation Desert Shield, which began on 17 January 1991, was followed by a ground offensive operation, Desert Storm, launched on 24 February 1991. During the operation, which lasted around 100 hours, most of the Iraqi military forces on the Kuwaiti battlefield were destroyed, with the remaining elements fleeing or surrendering.
